‘Creative destruction’ dents inclusion, ups output: Reserve Bank of India governor Shaktikanta Das

MUMBAI: Reserve Bank of India governor Shaktikanta Das said that post-pandemic recovery across the globe has been uneven and the crisis has dented inclusivity. At the same time, it has unleashed ‘creative destruction’ which will boost productivity and can alter the course of development.
The governor pointed out that the fillip to automation and digital during the pandemic would improve productivity, but it would provide challenges to inclusiveness and slack in the labour market. “Such a scenario calls for significant skilling/training of our workforce. We also need to guard against any emergence of “digital divide” as digitisation gains speed after the pandemic,” said Das.
According to Das, the government needs to provide a big push to investment in health, education, low-carbon and digital economy in addition to transport and communications. In addition, the warehousing and supply-chain infrastructure will be critical to bolstering value addition and productivity in the agriculture and horticulture sector.
“This will create employment opportunities in semi-urban and rural areas and promote inclusive growth,” said Das, delivering the keynote address at the 48th National Management Convention of the All India Management Association.
Das noted that the pandemic has affected the poor and vulnerable more, especially in emerging and developing economies. “The lasting damage inflicted by the pandemic on these segments is of serious concern for inclusive growth. In the medium to long-run, both efficiency and equity will greatly matter for sustainable growth and macroeconomic performance,” said Das.
The RBI governor said that the government’s measures to boost manufacturing in the country has yielded results. “The pandemic has brought to focus what India can achieve in the area of manufacturing. In the pharmaceutical sector for the first time in history, vaccines were developed and administered within a year with India remaining a forerunner and a global leader in vaccine manufacturing,” said Das.
He noted that the Production Linked Incentive (PLI) scheme introduced by the government has resulted in India being home to almost all the leading global mobile phone manufacturers and turning from being an importer to an exporter of mobile phones. “This trend is likely to spill over to other sectors also. The presence of global players would help in enhancing India’s share in Global Value Chain (GVC) and building up a resilient supply chain network,” said Das.
Das said that sustainable growth should entail building on macro fundamentals via medium-term investments, sound financial systems and structural reforms. “Towards this objective, a big push to investments in healthcare, education, innovation, physical and digital infrastructure will be required,” said Das.

Source link

Author: Shirley